Volkswagen Group of America Moves Forward With 'Strategy 2018' Plan

-- 2008 Year of Change Initiatives Place Group on Solid Foundation --

HERNDON, Va., Jan. 12 /PRNewswire/ -- Volkswagen Group of America, Inc.
asserted solid progress toward growing its sales and market share in the U.S.
was made in calendar year 2008, current economic conditions notwithstanding.
The company has set a goal of selling one million Volkswagens and Audis by
2018, as part of the worldwide Volkswagen Group's focus on becoming an
economic and environmental leader in the global automotive industry. In the
U.S., the Group saw an exciting year of change, taking steps in such areas as
product quality, product offerings, brand management, customer experience,
technology, retail support and manufacturing to strengthen its standing in the
world's premier market.
"We all know the many difficulties the automotive sector faced in 2008.
There is no doubt that 2009 looks to be at least as challenging, yet we are
optimistic for a bright future here in the U.S.," said Stefan Jacoby,
President and CEO for Volkswagen Group of America. "Increased market share,
products right for the times, creative marketing, strong retail support,
engaged employees and a motivated and enthusiastic dealer body all have and
will continue to play an important role in meeting the challenges ahead."
Volkswagen's bullish outlook is based on the many key measures put in
place throughout 2008.
First and foremost, five new products from Volkswagen and four from Audi
hit the streets in 2008. The expanded product line garnered positive
reactions from dealers, customers, the media and highly regarded industry
experts. "The introduction of the Tiguan, Routan, Jetta TDI, Jetta
Sportwagen, and CC from Volkswagen and the A4, A5, TTS and a refreshed A3 from
Audi contributed to the Group increasing its market share by 20 percent in
2008 and places the Group in a good position to meet the needs of customers
seeking vehicles that are efficient, environmentally friendly, safe, well-
built and apportioned, and attractively priced," Jacoby added.
Accolades and awards bestowed on Volkswagen and Audi in 2008 included "Top
Safety Pick" recognition from the Insurance Institute for Highway Safety
(IIHS) for seven 2009 Volkswagen models -- the Tiguan, Jetta, Jetta
Sportwagen, Eos, Rabbit, Passat and Passat Wagon. IIHS also awarded top safety
marks to the 2009 Audi A3, A4, A6 and Q7.
The Audi R8 sports car earned Automobile Magazine's "2008 Car of the Year"
and "Design of the Year" honors. On top of that, the Robb Report and Playboy
named the R8 "Car of the Year" in their competitions. Automobile Magazine
further recognized Audi's design leadership by picking the A5 as its "2009
Design of the Year." Strategic Vision chose the Q7 as a "2009 Total Value
Index" winner along with the A3.
Kelley Blue Book recognized the Volkswagen brand with its 2008 Best Resale
Value Award, the Rabbit for "Top 10 Coolest New Cars Under $18,000," and "Top
10 New Back-to-School Cars," among others. Car and Driver recognized the GTI
as one of its "2008 10 Best Cars." Automobile Magazine gave the Volkswagen
GTI and the Audi R8 "2009 All-Star Award" recognition.
Volkswagen improved its position in the J.D. Power Initial Quality Survey.
Volkswagen brand continued to do well in Strategic Vision's Total Quality
Index which offers a complete measure of new vehicle owner satisfaction,
evaluating all aspects of the ownership experience.
"The Group is making investments in a next-generation Volkswagen Compact
Sedan, as well as the Rabbit, GTI, Touareg TDI, Rabbit TDI and Audi Q7 TDI
that we will be introducing in 2009 and 2010," said Jacoby.
The Group also made significant investments in its manufacturing, central
functions, design, engineering and research operations in 2008. "First among
these is the $1 billion investment in the new production facility in
Chattanooga, Tennessee, which is progressing nicely. This plant will build a
new Mid-size Sedan designed specifically for the U.S. market and destined to
play a key role in meeting our long term goal," said Jacoby. "This plant will
create 2,000 direct jobs in the region." According to studies, the new plant
is expected to generate $12 billion in income growth and an additional 9,500
jobs over the life of the project. Start of production is slated for early
2011, with an annual capacity of 150,000 vehicles, 30 percent of which will be
powered by Volkswagen's TDI clean diesel technology.
The Group also made investments in its manufacturing operations in Mexico
and Europe that will benefit U.S. customers as well.
2008 also witnessed how the future will drive with the introduction and
demonstration of new powertrain, safety and customer convenience technologies
from Volkswagen. The August introduction of TDI clean diesel technology in
the U.S. market, a first for Volkswagen, is proof of the Group's commitment to
provide customers an alternative in their purchase of fuel efficient, clean
emissions vehicles that are also fun to drive. The Jetta TDI was recently
named 2009 Green Car of the Year.
The Group also demonstrated its work on environmentally responsible
technologies beyond clean diesel. At the Los Angeles Auto Show, Volkswagen
showed no less than three fuel cell prototypes of the Tiguan, Touran, and
Passat Lingyu. Sixteen fuel cell vehicles are currently being tested on the
roads of California in a durability study conducted as part of the California
Fuel Cell Partnership. The Group also was part of a historic two-week
adventure in summer 2008 that spanned the U.S. and demonstrated the power of
hydrogen in the form of a zero-emission HyMotion Tiguan.
Audi showcased the range and capabilities of its clean diesel TDI models
by sponsoring a 4,800-mile coast-to-coast Audi Mileage Marathon. In that
endurance test, teams of drivers competed to maximize the efficiency of 23 A3,
A4, Q5 and Q7 TDI models. The Audi A3 2.0 TDI achieved an impressive 47.04 mpg
on average, and during one stage squeezed more than 50 miles from a gallon of
diesel, on average.
At the same time the Volkswagen Group was showcasing an array of
innovative and economical drive technologies on the West Coast, its
investments in smart car technologies, including autonomous vehicles, were
being demonstrated on the streets of New York at the Intelligent
Transportation Systems World Congress. Using advanced sensors, artificial
intelligence and a process called sensor fusion, Volkswagen demonstrated how
it is working to making driving safer, easier and more comfortable by
connecting systems within the car and with the environment outside the car
through car-to-car and car-to-infrastructure capability.
"Developments in smart car technologies where cars are capable of
collaborating with their users and their environment portend great advances in
safety and environmentally friendly vehicle efficiency," predicted Jacoby.
One smart technology that is proving its worth is electronic stability
control (ESC), branded by Volkswagen as Electronic Stabilization Program,
which Volkswagen made standard on all 2009 models, a full three years ahead of
the government mandate. The National Highway Traffic Safety Administration
(NHTSA) and the IIHS have stated their research has found ESC results in 35
percent fewer single-vehicle crashes, 30 percent fewer single-vehicle
fatalities in passenger cars, could save 10,000 lives annually and reduce
rollover risk by as much as 80 percent. Audi introduced ESP to the U.S.
market in 1999, making it standard on all vehicles since model year 2002.
Volkswagen also took steps in the operational end of its business to
strengthen the brand. More than half its Volkswagen brand dealers have
invested in the Marketplace exclusive showroom concept, an approach that is
paying dividends in increased sales. The firm relocated its U.S. headquarters
to be closer to its customers, while keeping a significant presence in the
technical capital of the industry. And Volkswagen brand added peace of mind
to the already long list of benefits that come with owning a well-engineered
Volkswagen: the Carefree Maintenance Program. Under the new Carefree
Maintenance Program, there are no charges for regularly scheduled maintenance
activities on 2009 models for three years or 36,000 miles, whichever comes
first.
Audi saw its dealers commit nearly $1 billion of investment in the brand
with ongoing and future upgrades. Audi dealers also enjoy one of the
automotive industry's strongest returns on investment.
The operational measures extend to its finance arm. The need for a
reliable, fiscally sound credit source is also an absolute necessity in order
to continue to grow the Volkswagen and Audi business. Volkswagen Credit is a
valuable asset, recording another profitable year in 2008. JD Power recently
ranked Volkswagen Credit and Audi Financial Services near the top in their
annual Surveys on dealer financing satisfaction for purchases and leases.
"Volkswagen Credit will continue to play a key role in our push towards
greater volume and profitability. Our Volkswagen and Audi dealers count on a
strong financial partner for their floor plan requirements as well as a
consistent buyer of financial paper," said Jacoby.
"2008 has been a year of transition for our company. We have reset the
start button on virtually all of our business units and processes. We have
taken great strides towards becoming the most innovative high-volume brands in
the U.S. We look confidently towards the future," said Jacoby.
About Volkswagen Group of America, Inc.
Volkswagen Group of America, Inc. is a wholly-owned subsidiary of
Volkswagen AG, the world's third largest automaker and the largest carmaker in
Europe. It houses the U.S. operations of a worldwide family of distinguished
and exciting brands including Audi, Bentley, Bugatti, Lamborghini and
Volkswagen, as well as VW Credit, Inc. Founded in 1955, the company's
headquarters are in Herndon, Va.
Volkswagen Group of America brings to the U.S. vehicles that marry the
science of engineering and the art of styling, with the goal of offering
attractive, safe, and environmentally sound automobiles that are competitive
and set world standards in their respective classes.
The company has approximately 2,500 employees in the United States and
sells its vehicles through an 800-strong dealer network. With increasing
popularity for its brands in the U.S., the company has set the goal of
reaching one million car sales in the country by 2018.
For more information, visit www.volkswagengroupamerica.com.
SOURCE Volkswagen Group of America, Inc.

Jill Bratina of Volkswagen Group of America, Inc., +1-202-957-0715,
jill.bratina@vw.com